Chinese Company Sued in Texas Over 100,000 Allegedly Defective COVID-19 Tests

A generic image of a person using a SARS CoV-2 Rapid Antigen Test in Canberra, Australia, on Nov. 2, 2021. (AAP Image/Lukas Coch)

Early in the COVID-19 pandemic, when front-line medical workers in the United States were desperate to acquire crucial medical gear and supplies, a Texas-based mobile health company paid about $500,000 for 100,000 antibody test kits from China—the only place at the time that was selling the much-needed products.

But the kits, which were supposed to fill orders from the U.S. military and state customers, never went further than the warehouse where the products were delivered before July 2020.

Following months of delays after a concerning number of the tests were determined to be defective, the Texas-based company, AnyPlace MD, has sued the China-based seller in the Austin division of the U.S. District Court for the Western District of Texas in hopes of recouping its losses.

The contract agreed to in May 2020 required Shane Stevens, CEO and owner of AnyPlace MD, to make a 75 percent down payment totaling $481,125 to Anhui DeepBlue Medical Technology, the Chinese test kit supplier, with the remaining $118,875 due a month later. After receiving the tests, Stevens said he quickly discovered, upon running a sample check, that a significant number of the kits produced false-positive results or “ghost lines”—lines that are hard to interpret and “appear to indicate a positive test.”

An early July 2020 email exchange with a joint venture partner, Reliant Immune Diagnostics, a second plaintiff in the lawsuit, highlighted a screenshot taken from the U.S. Food and Drug Administration’s website showing that DeepBlue, along with four other China-based COVID-19 test manufacturers, was flagged by the U.S. regulator as having products that “should not be distributed.”

AnyPlace apparently isn’t the only company that has filed complaints about the China-based supplier. In Laredo, Texas, investigators from the U.S. Department of Homeland Security seized 20,000 DeepBlue test kits, after health department officials determined that the tests had only a 20 percent accuracy rate, according to local media reports from April 2020.

Around that time, defective medical supplies from China, such as masks and testing kits, were already drawing backlash from countries such as Finland, the UK, and Ireland, leading to recalls of millions of items. In August 2020, Sweden announced that 3,700 residents were erroneously told they had the virus due to defective testing kits made in China.

On July 10, 2020, AnyPlace and Reliant Immune Diagnostics contacted Rallo Holdings, the company that had brokered the deal with DeepBlue, rejecting the goods and asking for a refund. Stevens would spend the next few months trying to get the nearly $500,000 back.

When he was eventually connected with Li Zeyu, a DeepBlue representative, in September 2020, Li apologized for the delay in refund, saying that the company was working on securing sales for the products in Mexico or other South American countries, so that there “will be not lost or just a small lost [sic].”

“Why are you guys trying to sell these tests to anyone else?” Stevens replied, according to a message history he shared with The Epoch Times. “They are not good. Ghost [lines], false positives ... They are not good tests.”

Li responded that AnyPlace’s allegations about the lab results “were not correct,” and said that the company had only agreed to the refund because of the FDA’s delisting.

“By the way. deep blue sold about 10 million test kits total. we got bad result and refund less than 50k total. ... So we don’t think there is a big problem in our products,” Li told Stevens on the Chinese messaging platform WeChat.

Anhui DeepBlue Medical Technology officials didn’t respond by press time to a request by The Epoch Times for comment.

The FDA, while not specifically commenting on the imported products from Anhui DeepBlue, told The Epoch Times in an email that it “intends to remove tests for which FDA has either issued an EUA or has notified the test developer by email that FDA declines to review, declines to issue, or otherwise decides not to authorize the test for any reason.”

In an April 2020 notice, the agency had warned that some test developers at the time were “falsely claiming that their serological tests are FDA approved or authorized, or falsely claiming that they can diagnose COVID-19.”

“The FDA will take appropriate action against firms making false claims or marketing tests that are not accurate and reliable,” it said.

According to the lawsuit, the two U.S. firms said that they mistakenly believed that an FDA certificate document shared by DeepBlue, which was issued to mark an antibody test registration with the FDA, would ultimately lead to the product receiving FDA approval.

The upfront payment that AnyPlace made represented 50 percent of the company’s cash reserves.

“It hurt us badly,” Stevens told The Epoch Times. “We had to stop buying COVID tests in the volumes that we were doing for quite some time while we recovered and recouped.”

The lawsuit was his “last resort,” he said, and he remains “very hopeful” for its success.

“If you ask other folks who have tried to deal with companies in China, they might say that it’s a low probability. But a lot of times, I just have to do what I think is right. And in the back of my head, I’m thinking, what if some other company doesn’t have the resources? What if some other companies put everything on the line to try and buy something from them? That would have bankrupted that company,” he said.

“It’s dangerous having companies out there that are like this. ... So I feel it’s an obligation for me to do it, regardless of the outcome.”